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A flesh-eating parasite returned to Texas cattle in June after a six-decade absence and quickly became an easy explanation for record beef prices. The evidence points elsewhere. The more consequential story began years ago, when ranchers started shrinking the national herd — and rebuilding it will initially tighten supply further.
Initial claims for the week ending August 8 came in at 209,000, up 9,000 from the prior week's revised 200,000 and above the 202,000 economists expected. The steadier number is the four-week moving average, which held at 199,000 — the smoothing that keeps a single noisy week from being mistaken for a trend. Continuing claims fell 22,000 to 1,777,000, with the insured unemployment rate unchanged at 1.2%, a labor market that keeps refusing to break in either direction.
The Producer Price Index for final demand was unchanged in July after edging down 0.1% in June, against forecasts of a 0.2% rise. The flat headline hides a split: services rose 0.2% and construction jumped 2.2%, while goods fell 0.7%. Strip out food, energy and trade services and prices rose 0.4% — and that measure is up 4.7% over twelve months, the same as the headline, which is the part that should bother anyone expecting wholesale costs to stop feeding into consumer prices.
Core prices rose 0.2% for the month and 2.5% over the year, with every reading landing where forecasters expected. Two consecutive tame months suggest the energy-driven burst earlier this year is fading. The catch sits underneath the headline: inflation is still running ahead of the 3.2% wage growth in last week's jobs report, so purchasing power keeps eroding even as the number improves — and 3.4% remains well clear of the Fed's 2% target.
Economists expected a gain of 83,000. Instead nonfarm payrolls contracted, and downward revisions to May and June dragged the 12-month average to just 34,000. Unemployment ticked down to 4.1% — but only because the labor force shrank, pushing participation to 61.4%, its lowest outside the Covid era since 1976. Wage growth slowed to 3.2% annually, the weakest since May 2021, and traders promptly cut the odds of a September Fed hike to 44%.
Everyone expected China to panic when the Strait of Hormuz closed. Instead it stopped buying oil — imports fell 32% in a single quarter — and the satellites watching its storage tanks still can't account for where two million barrels a day of demand went.
ADP's count came in well under the 75,000 economists expected and down sharply from June's revised 95,000. Services carried the entire gain while goods-producing industries shed 3,000 jobs. Pay for workers who stayed put held at 4.4% year-over-year, but job-switchers pulled a 7% raise — their biggest in nearly a year, and a sign parts of the labor market are still supply-constrained.
Three Fed officials just dissented in favor of a rate hike at the same meeting — the first time that's happened since 2016. Chair Kevin Warsh says that's not a crisis. He says it's the design working.
The Commerce Department's advance estimate came in well below the 2.1% growth economists expected, even as consumer spending jumped to a 3.2% pace and businesses kept pouring money into AI-related equipment. The drag came from trade: a surge in imports tied to AI infrastructure build-outs widened the deficit and subtracted more than a full point from growth. The report lands a day after the Fed's contentious 9–3 vote to hold rates.
The FOMC left its benchmark rate at 3.5%–3.75%, but Dallas's Lorie Logan, Cleveland's Beth Hammack, and Minneapolis's Neel Kashkari all dissented in favor of a quarter-point hike — the first time since September 2016 that three officials broke ranks in the same direction. Markets had priced roughly a 35% chance of a surprise increase. Chair Kevin Warsh, in only his second meeting, said he "asked for a good family fight, and I got one." The 30-year Treasury yield jumped 12 basis points to 5.21%, a 19-year high.
A week-ahead look at markets: Microsoft and Meta report Wednesday and Apple and Amazon Thursday — together roughly 17% of the S&P 500's value — while the FOMC concludes Wednesday with a Warsh press conference and the advance Q2 GDP reading lands Thursday, all with oil near $100.
Headline CPI fell 0.4% in June from May as gasoline prices dropped sharply, bringing the annual inflation rate down to 3.5%.
New data shows America's wealthiest households now account for a share of discretionary spending that rivals the entire bottom 70% — a stark illustration of the K-shaped economy powering consumer growth.
A reserve born from a 1973 fright is being tested as never before. As the Strait of Hormuz hangs in the balance, the salt caverns of the Gulf Coast are finally being asked to be exactly what they were built to be.